INCOME TAXES	6 Months Ended
Mar. 30, 2012
INCOME TAXES	NOTE 7 – INCOME TAXES The provision for income taxes for the second quarter of 2012 was recorded based upon the current estimate of the Company’s annual effective tax rate. Generally, the provision for income taxes is the result of a mix of profits (losses) the Company and its subsidiaries earn in tax jurisdictions with a broad range of income tax rates. The tax provision of $127 for the three months ended March 30, 2012 was generated by a mix of tax expense in foreign jurisdictions, state taxes, and the settlement of a French tax audit. Additionally in the second quarter of 2012 the Company established a valuation allowance for certain deferred tax assets due to its cumulative three year operating loss in Finland, which was offset by the release of uncertain tax positions relating to research credits in the United States as a result of the expiration of the statute of limitations. Comparatively, the tax benefit of $81 million recognized in the second quarter of 2011 was driven by tax expense in certain foreign jurisdictions and state taxes, offset by larger benefits resulting from losses in other foreign jurisdictions. For the three months ended March 30, 2012 the negative effective tax rate of 1.9% differs from the federal statutory rate due to the valuation allowance on U.S. and Finnish losses and the release of uncertain tax positions. The effective tax rate of 45.8% for the three months ended April 1, 2011 differs from the federal statutory rate largely as a result of the Company’s valuation allowance on its U.S. net operating losses during the quarter. Other significant factors include the effects of the Company’s operations in foreign jurisdictions with different tax rates, and the provision for state income taxes. The Company establishes a valuation allowance for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized. In the second quarter of fiscal 2012 the Company recorded a valuation allowance against its Finnish deferred tax assets due to the cumulative losses discussed above. In fiscal 2007 the Company determined that a valuation allowance should be recorded against all of its U.S. deferred tax assets, and as of March 30, 2012 the Company continues to place a valuation allowance its U.S. deferred tax assets. While a valuation allowance is still in place for financial statement purposes as of March 30, 2012, the valuation allowance does not limit the Company’s ability to utilize the loss-carryforwards or other deferred tax assets on future tax returns. The Company is subject to taxation primarily in the United States, Finland, and France, as well as in certain states (including Oregon and California) and other foreign jurisdictions. The Company’s larger jurisdictions generally provide for statutes of limitations from three to five years. The Company has settled with the Internal Revenue Service on their examination of all United States federal income tax matters through fiscal year 2008. The Company has also settled the Finnish tax authority’s examination of the Company’s returns for all tax years through 2006. In January 2011 the French tax authority began a routine examination of the Company’s French tax returns for fiscal years 2009 and 2010, which was settled in the second quarter of 2012. The Company does not anticipate total gross unrecognized tax benefits will significantly change, either as a result of full or partial settlement of audits or the expiration of statutes of limitations within the next 12 months. The Company has not provided for U.S. income taxes on the undistributed earnings of foreign subsidiaries because they are considered permanently invested outside of the United States. If repatriated, these earnings would generate foreign tax credits, which may reduce the federal tax liability associated with any future foreign dividend. As of March 30, 2012 the undistributed earnings of these foreign operations were approximately $2,700.

NOTE 7 – INCOME TAXES

The provision for income taxes for the second quarter of 2012 was recorded based upon the current estimate of the Company’s annual effective tax rate. Generally, the provision for income taxes is the result of a mix of profits (losses) the Company and its subsidiaries earn in tax jurisdictions with a broad range of income tax rates. The tax provision of $127 for the three months ended March 30, 2012 was generated by a mix of tax expense in foreign jurisdictions, state taxes, and the settlement of a French tax audit. Additionally in the second quarter of 2012 the Company established a valuation allowance for certain deferred tax assets due to its cumulative three year operating loss in Finland, which was offset by the release of uncertain tax positions relating to research credits in the United States as a result of the expiration of the statute of limitations. Comparatively, the tax benefit of $81 million recognized in the second quarter of 2011 was driven by tax expense in certain foreign jurisdictions and state taxes, offset by larger benefits resulting from losses in other foreign jurisdictions.

For the three months ended March 30, 2012 the negative effective tax rate of 1.9% differs from the federal statutory rate due to the valuation allowance on U.S. and Finnish losses and the release of uncertain tax positions. The effective tax rate of 45.8% for the three months ended April 1, 2011 differs from the federal statutory rate largely as a result of the Company’s valuation allowance on its U.S. net operating losses during the quarter. Other significant factors include the effects of the Company’s operations in foreign jurisdictions with different tax rates, and the provision for state income taxes.

The Company establishes a valuation allowance for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized. In the second quarter of fiscal 2012 the Company recorded a valuation allowance against its Finnish deferred tax assets due to the cumulative losses discussed above. In fiscal 2007 the Company determined that a valuation allowance should be recorded against all of its U.S. deferred tax assets, and as of March 30, 2012 the Company continues to place a valuation allowance its U.S. deferred tax assets. While a valuation allowance is still in place for financial statement purposes as of March 30, 2012, the valuation allowance does not limit the Company’s ability to utilize the loss-carryforwards or other deferred tax assets on future tax returns.

The Company is subject to taxation primarily in the United States, Finland, and France, as well as in certain states (including Oregon and California) and other foreign jurisdictions. The Company’s larger jurisdictions generally provide for statutes of limitations from three to five years. The Company has settled with the Internal Revenue Service on their examination of all United States federal income tax matters through fiscal year 2008. The Company has also settled the Finnish tax authority’s examination of the Company’s returns for all tax years through 2006. In January 2011 the French tax authority began a routine examination of the Company’s French tax returns for fiscal years 2009 and 2010, which was settled in the second quarter of 2012. The Company does not anticipate total gross unrecognized tax benefits will significantly change, either as a result of full or partial settlement of audits or the expiration of statutes of limitations within the next 12 months.

The Company has not provided for U.S. income taxes on the undistributed earnings of foreign subsidiaries because they are considered permanently invested outside of the United States. If repatriated, these earnings would generate foreign tax credits, which may reduce the federal tax liability associated with any future foreign dividend. As of March 30, 2012 the undistributed earnings of these foreign operations were approximately $2,700.